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Problem - Schedule of Cash Collections
Sugarland Company sells a single product and anticipates opening a new facility in Charlotte on May 1 of the current year. Expected sales during the first 3 months of activity are as follows: May, $60,000; June, $80,000; and July, $85,000.
Thirty percent of all sales are for cash; the remaining 70% are on account. Credit sales have the following collection pattern:
Collected in the month of sale 60%
Collected in the month following sale 35
Uncollectible 5
Required -
a. Prepare a schedule of cash collections for May through July.
b. Compute the expected balance in Accounts Receivable as of July 31.
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